BSkyB nearing deal for its Sky Europe takeover

Oliver Smith is a senior reporter at The Memo, an online publication curious about the future of technology. He was formerly a reporter at City A.M.

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Rupert Murdoch has long championed the Sky Europe move

BSkyB is reportedly finalising plans to take over its sister companies in Italy and Germany in a deal that could be sealed in coming weeks.

The agreement would bolster parent company 21st Century Fox’s $80bn (£47bn) bid, revealed last week, to take over US media conglomerate Time Warner.

Fox chairman and chief executive Rupert Murdoch has long championed the so-called Sky Europe move that would see BSkyB, Sky Deutschland and Sky Italia combined.

Such a tie-up would make sense in that it would give the combined assets more firepower when trying to bid for sports rights across Europe.

If a deal were to be agreed it could see Fox receive a windfall of more than €8bn (£6.3bn) due to its holdings in Sky Italia and Sky Deutschland, according to The Sunday Times.

However, the deal to turn BSkyB into a European satellite-TV giant would face significant scrutiny from a number of regulators, including Ofcom.

Ofcom is expected to put such a deal through the most stringent scrutiny by conducting a media plurality test designed to ensure there are a number of different voices and owners in the media industry.

In May BSkyB confirmed it had initiated preliminary discussions with Fox to evaluate the potential acquisition of its pay-TV assets in Germany and Italy.

“BSkyB believes at the right value, this combination would have the potential to create a world-class multinational pay TV group,” BSkyB said.

BSkyB declined to comment.

Last week BSkyB sold its 6.4 per cent stake in ITV to European cable operator Liberty Global for £481m. The stake sale hinted that BSkyB is looking to raise cash to push ahead with its Sky Europe plans.

“The sale by Sky consists of 259,820,065 ITV shares at 185p per share for an aggregate consideration of approximately £481m. Sky intends to use the proceeds for general corporate purposes,” BSkyB said on the disposal last week.